Background
This Ruling forms part of a wider piece of work on unregulated investments, identified for investigation following intelligence gathered by the ASA.
Ad description
A press ad by Gold Bank, seen on 18 May 2024, featured images of both sides of gold bullion. Text stated, “GOLD BANK LONDON RISE OF THE PHOENIX COULD THIS BE THE BEST INVESTMENT YOU’VE EVER MADE?”
Issue
The ASA challenged whether the ad was misleading because it failed to illustrate the risks of the investments.
Response
Gold Warehouse Ltd t/a Gold Bank said the claim, "could this be the best investment you've ever made?" was not making any claim that it was or was not the best investment to purchase the gold. It was just inviting the consumer to think about it by asking them the question. They said the claim could be amended instead to say something like, "could this be the best-looking gold bar you've ever seen?”. They also said they could add additional text to their ad to say gold prices could be volatile and that the price of gold may go up as well as down.
Assessment
Upheld
The CAP Code required that material information should not be omitted and should be presented clearly. The ASA understood that the gold investment market was not regulated within the UK, nor was it subject to the protections afforded by the Financial Services Compensation Scheme or the Financial Ombudsman Service. We considered that was likely to be material information that consumers required in order to make informed decisions about Gold Bank’s services. In addition the CAP Code required that marketing communications for investments should make clear that the value of investments was variable and, unless guaranteed, could go down as well as up.
The ad featured images of gold bullion, with text that stated, “Gold Bank […] could this be the best investment you’ve ever made?”. We considered consumers would understand from the ad that if they purchased the gold bullion, it would provide them with a significant return that could exceed alternative types of investment which they could make. We considered that because the gold bullion had been presented as an investment, the ad should have included text which stated that the value of investments could go down as well as up and that gold investment was unregulated.
Because the ad did not include any risk warnings that the value of gold prices could go down as well as up, and that gold investment was an unregulated activity, we concluded it was misleading and breached the Code.
The ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification) and 14.4 (Financial products).
Action
The ad must not appear again in its current form. We told Gold Warehouse Ltd t/a Gold Bank that their future advertising must make clear that gold investment was unregulated and that the value of investments was variable and could go down as well as up.
